Question

Super stuck on a couple of questions on this scenario.

Advanced Scenario 7: Mark and Barbara Matthews Directions Using the tax software, complete the tax retum, including Form 1040 and all appropri- ate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNS) or Employer identification Numbers (EINS), replace the Xs as directed, or with any four digits of your choice. Interview Notes • Mark and Barbara are married and want to file a joint retum. • Mark retired and began receiving retirement income on March 1, 2017. No distribu- tions were received prior to his retirement. Mark selected a joint survivor annuity for these payments. The plan cost at annuity start date was $14,500. Mark has already recovered $1,029 of his cost in the plan. The Matthews received a $125 state income tax refund from their 2018 state tax return. The Matthews do not have enough deductions to itemize for 2019 and they have never itemized deductions. • Mark and Barbara stated if they are entitled to a refund, they want half of it depos- ited into their checking account and the other half deposited into their savings account. The checking account number is 123456789 and the savings account number is 987654321. Both accounts are from Adelphi Bank and Trust. SOCIAL SECURITY SOCIAL SECURITY www 317-00-XXXX ECE 310-00-XXXX Mark Matthews Barbara Matthews Mark Marthons Bartara Matikeus

Answer 1

22. TRUE.

Taxation of interest

When you receive a 1099-INT, you’ll need to understand what each box of the form is reporting, so that you can report your interest on the appropriate lines of your tax return:

• Box 1 of the 1099-INT reports all taxable interest you receive, such as your earnings from a savings account.
• Box 2 reports interest penalties you’re charged for withdrawing money from an account before the maturity date.
• Box 3 reports interest earned on U.S. savings bonds or Treasury notes, bills or bonds. However, some of this may be tax-exempt.
• Box 4 reports any federal tax withheld on your interest income by the payer.
• Box 8 relates to interest-bearing investments you hold with state and local governments, such as municipal bonds.

24. Taxable Portion of Marks Pension from Pine Corporation is

c) $ 21971

Explanation:-

Exclusion months in 1st year	12
Total months to be excluded	310
Monthly exclusion	46.77
First year exclusion	561
Exclusion for remaining years	561
Final year exclusion (2042)	475

Tax Exclusion Table:

Tax Year	Recovered Prior years	Exclusion this year	Remaining cost
2017	0	561	13939
2018	561	561	13378
2019	1122	561	12817
2020	1683	561	12256
2021	2244	561	11695
2022	2805	561	11134
2023	3366	561	10573
2024	3927	561	10012